Moving overseas is more than a change of address—it marks a legal and financial transition to non-resident Indian (NRI) status. While visas are stamped and suitcases packed, many Indians overlook critical financial steps that can later lead to unexpected taxes, penalties, or logistical headaches.
According to wealth advisors, a smooth transition requires timely paperwork, account restructuring, and careful management of assets and liabilities before departure.
Update banking status and mutual fund KYC
One of the first steps after moving abroad is updating your residency status with banks and tax authorities.
“Once your stay overseas crosses the prescribed limit, your status changes from resident to non-resident. You must update this in your PAN records and convert your bank accounts to NRO or NRE, depending on your income sources,” said Amol Joshi, founder of PlanRupee Investment Services to the Mint.
An NRE account is used for foreign earnings remitted to India, while an NRO account is required to manage India-sourced income such as rent, dividends, or pensions.
After updating bank accounts, investors must also change their mutual fund KYC and folios from resident to non-resident status. This conversion is possible only if an NRO account is in place.
Appoint a power of attorney
Managing Indian assets from abroad can be operationally difficult. Experts recommend appointing a power of attorney (POA)—typically a parent or trusted relative—to handle documentation and local coordination.
“For instance, if you own a rental property and need to renew a lease or sign documents, a POA can manage this on your behalf. Many people skip this step and face complications later,” said Vinit Iyer, principal officer and managing director at Prudeno Wealth Advisors as per a Mint report.
Review investment rules
Certain investment rules change once you become an NRI.
NRIs cannot open a new Public Provident Fund (PPF) account, but existing accounts can be continued until maturity. “NRIs can keep making fresh contributions and earn interest on existing PPF accounts, but unlike residents, they cannot extend the account beyond the initial 15-year term,” Joshi explained.
Other investments should also be reviewed to ensure compliance with NRI regulations.
Inform insurers and update tax residency
Residency changes must be communicated to insurance providers. Even if you have overseas health coverage, maintaining an Indian health insurance policy can be useful, particularly for treatments that are more affordable in India.
Tax compliance is critical. Individuals must update their residency status on the income tax portal to avoid double taxation or penalties.
“Residents are taxed on global income, while NRIs are taxed only on India-sourced income. Failing to update your status can result in incorrect tax filings and compliance issues,” Iyer noted.
Many individuals also fail to correctly report income either in India or in their country of residence, creating further tax risks.
Settle liabilities and rationalise assets
Before leaving India, all outstanding liabilities should be cleared. Unpaid credit card dues are among the most commonly overlooked issues.
“Even small unpaid bills can impact your credit score, which becomes a problem if you return to India and need loans,” Joshi warned.
On the asset side, those relocating long-term should consider selling depreciating assets such as cars rather than leaving them idle. Sale proceeds can then be reinvested more efficiently.
A few weeks of administrative diligence before departure can prevent years of tax complications and operational challenges. Getting these financial basics right allows individuals to focus on building a new life overseas—without leaving behind costly loose ends.
